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Corporate Tax

Our clients value our personal and professional approach to corporate tax services and they rely on us to resolve tax issues swiftly and efficiently, regardless of the size or complexity of their business. Whatever corporate tax issue or challenge you are facing, we have the experience, skill and understanding you require. Contact us today to find out how we can assist you.

Employee Ownership Trusts

An EOT is a type of employee benefit trust that was introduced by the government in September 2014 in an effort to encourage more shareholders to establish a corporate structure giving greater employee ownership, albeit through an indirect holding.

The government provided very generous tax breaks to encourage shareholders to transition to an employee-ownership model. However, in order to qualify for the tax breaks, employee ownership must be structured in a specific way which our team of tax specialists can guide you through.

Capital Allowances Services

Capital allowances are a useful tool for reducing the after-tax cost of purchasing plant, equipment, fixtures, and fittings, as well as acquiring, building, fitting out, or refurbishing property. Not all capital expenditure qualifies for capital allowance relief as it must be on a specific asset type. Typically, you must own the asset for which capital allowances are claimed. If you hire or lease the asset, you cannot normally claim capital allowances, but you may be able to get tax relief on the rental costs as revenue expenditure.

Transaction Tax

When entering into either an acquisition or merger, tax can become a key aspect of the planning phase. Whether it be minimising tax cost on returns to shareholders, advice on investment decisions and the subsequent tax implications or efficiently structuring share and asset sales, our team can provide expert guidance. Working closely aside our transaction advisory services team, our tax specialists can provide technical and commercial oversight on tax due diligence projects for buy-side and sell-side transactions and advise on pre-acquisition and post-acquisition tax structuring.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is paid by the purchaser in a land transaction, which includes not only the simple conveyance of land, such as buying a house, but also the creation or assignment of a lease. If you are considering property investment or acquiring a lease on a commercial property, we can assist you in making tax-efficient property acquisitions.

Forensic Tax Accounting

Our highly skilled forensic tax accounting service are able to analyse, interpret and summarise complex financial issues on your behalf. In the event of the worse case scenario, our team are able to find evidence to show what and how something has happened, advise on what corrective steps, and ensure you reduce the chances of it happening again.

Expert witness

Our team of experts have experience of acting in both matrimonial and shareholder disputes.  We take appointment as court experts either for one party or as a single joint expert appointment. We can also provide shadow expert services help a disputing party to understand the financial and tax implications throughout the settlement negotiation or to assist interpretation, and provide challenges to, court expert reports.

Enterprise management incentives (EMI)

Enterprise management incentive (EMI) share options are specifically designed for trading companies with high growth potential, and are intended to aid in the recruitment and retention of employees. The process allows employers to grant share options to key employee’s tax efficiently, as a reward for their efforts within the business. In general, if an employer rewards an employee with unapproved shares, Income Tax and National Insurance Contributions are levied on the difference between the market value of the shares and any amount paid towards them, just like a salary or bonus. If, on the other hand, EMI options are granted at market value, there will be no charge to Income Tax or National Insurance Contributions at the time of grant or exercise. HMRC can provide prior agreement on the value of the company shares at grant.

Business Asset Disposal Relief (BADR)

BADR, formerly known as Entrepreneurs’ Relief, is a capital gains tax (CGT) relief designed to encourage individuals to expand and invest in their businesses, and it is a valuable source of relief for higher and additional rate taxpayers. Individuals selling personal businesses or partnership interests, as well as directors and employees selling shares in the company (or group of companies) for which they work, may be eligible for the relief. We can provide guidance in this complex area of tax planning.

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) is intended to help your company raise funds to help it grow. It achieves this by providing tax relief to individual investors who purchase new shares in your company. The money raised by the new share issue must be used for a certain qualifying business activities and the business must be within the eligible criteria, all of which our team of tax specialists can guide you through.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS)  is a system that is designed to raise up a maximum of £150,000 to help your company when it’s starting to trade. It does this by offering tax reliefs to individual investors who buy new shares in your company. There is certain criteria that needs to be met such as is not trading on a recognised stock exchange at the time of the share issue, being established in the UK AND not have gross assets over £200,000 when the shares are issued, amongst others. Our experienced team are able to guide you through the SEIS criteria and process.

Research & Development (R&D) Tax Relief

If a company invests money in developing new products, processes, or services for their business, or in adjusting and updating an existing product, service, or process, the company may be eligible to claim the R&D tax credit for R&D tax relief. R&D exists across a number of sectors, not just those in the technology space. To be eligible for R&D tax relief a business must be a limited company in the UK that is subject to Corporation Tax, Have carried out qualifying research and development activities, and spent money on these projects. Our extended knowledge in this area means we are to spot qualifying activities that may have previously gone unnoticed. In some situations, businesses are able to claim for two years previous qualifying activities.

Patent box

Patent Box is a more recent initiative that began in 2013. Patent Box initiatives are common in Europe, and they are also intended to reduce taxation on profits related to areas of innovation. Patent Box, in particular, can reduce corporation tax to 10% on profits earned through eligible patents.

Growth shares & Share incentive schemes

Our team can advise on a full range of employee share incentives including unapproved schemes, growth shares, Joint Share Ownership Plans as well as EMI as noted above.  Our team will help you navigate both the tax and commercial implications of implementing these employee incentives and can provide detailed models of the position in various exit scenarios.

Restructuring and reorganisations

Companies/groups need to restructure for a number of reasons.  This may be for commercial protection, to allow shareholder to part ways, to prepare for an exit event or simply to rationalise a group structure.  Our expert team can guide you through the complex rules relating to group reorganisation and provide you with proactive advice in relation to the most tax efficient way to achieve your desired result.

Valuation services

Our team is regularly involved in providing valuations for a variety of industries.  These valuations include fiscal valuations for tax reporting purposes, commercial valuations for business transaction and valuations to assist dispute settlements.  When we undertake a valuation we look further than the numbers and consider all factors that may affect the value of a business to provide the most accurate value for the business.  We can value minority shareholdings as well as full business valuations.

For more information about our Corporate Tax services
please get in touch.
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Insight

Divestiture: issues in separation and integration in unprecedented times

When a business takes the decision to divest a part of itself, there are a number of complicating factors that stand in the way of success, for both the seller and the acquirer. These have only been exacerbated recently by the long tail of COVID, by the war in Ukraine, by supply chain issues, by the tightening labour market, and by rapid inflation. However, the money is still there for good deals, both in the full coffers of PE houses, and from debt funders looking to deploy cash.

Separation and integration projects have differing objectives for sellers and buyers, but both need now more than ever to deliver for their respective stakeholders. The money in the market needs to be invested, and is available for the right transaction.

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Looking to set up a Furnished Holiday Let business?

Are you looking to set up a Furnished Holiday Let business (FHL)? Here are five things to watch out for.

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I have inherited a share of property. Does this have any tax consequences?

When a property is inherited, the estate may be subject to inheritance tax on the excess over the nil rate band. If the property was the deceased’s main home, and passes to direct descendants, the estate may qualify for an additional relief, termed a residence nil rate band. A previous insight has covered this topic in detail. This can lead to an additional nil rate band of up to £350,000, which would otherwise be taxed at 40%, giving rise to overall tax relief of up to £140,000. If this has not been achieved by the will, it is possible that this could instead be achieved through use of a deed of variation.

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A spotlight on future retail technology trends

I recently attended the Retail Technology Show at London Olympia.  This was my first in-person expo since before Covid, and it was a refreshing experience to catch-up with technology suppliers and retail ex-colleagues in person.

The show was extremely well organised, with an interesting variation of retail technology providers in attendance, ranging from start up tech firms to large multi-nationals – all showcasing both their current and future technology and software offerings.

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Cashflow-friendly employee incentives – the EMI scheme

Both businesses and employees are facing pressure on their finances arising from the recent tax hikes and the high levels of inflation that we are all experiencing. Now is therefore a good time to consider employee incentives that have minimal upfront cash outflow whilst providing potentially significant long-term rewards. This will help motivate and retain key members of your workforce.

For companies these can take the form of share incentives where an employee is provided with either shares, or ‘options’ to acquire shares at a future date, normally on the occurrence of certain events or performance targets being achieved.

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If I make a profit when selling or trading in my car, is this taxable?

In the current second-hand car market, it is common for people to be offered payment on return of their vehicle at the end of a PCP lease agreement. One would imagine that if the leaseholder refused this offer and sold privately, they may be able to make a greater profit. Alternatively, if a car has been purchased second-hand previously, it may be possible to sell this and even make an overall profit.

So, the question is, is this taxable?

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Spring Statement 2022 and tax rises

There has been a lot in the press made of the squeeze on household spending and the Chancellor was under much pressure to help with this when he approached the dispatch box on 23rd March to make the Spring Statement. His increase of the primary threshold for National Insurance is meant to be his key answer to that issue, but it is worth noting that from a business perspective this increasing threshold is not being mirrored to the secondary threshold for National Insurance and hence the 1.25% increase to Employers’ National Insurance is going ahead in full.

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How to sell your company tax-free: an Employee Ownership Trust

When a shareholder sells their shares, they are normally subject to capital gains tax on the disposal. There is however a way to undertake a company disposal and not pay any tax at all. The way to do this is to sell to an Employee Ownership Trust (EOT). EOTs were introduced in 2014 to encourage greater employee ownership of companies inspired by the John Lewis business model.
Since their introduction, popularity of this business model has been gaining momentum with more and more companies choosing to adopt this structure.

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Buy-side due diligence: what and why?

Buy-side due diligence is about doing the right deal at the right price.

In an environment in which competition for the right deal is strengthening, an acquirer needs to be certain that they can generate incremental value over and above any premium that needs to be paid to get the deal done.

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Below the threshold?

Understanding where your company falls in regard to audit thresholds is crucial to ensure that companies are able to adequately plan ahead should an audit become a necessity in the future. It is also important to be aware of the benefits of undertaking an audit as well as a voluntary audit may be worthwhile for your business.

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Lump Sum Exit Scheme for retiring farmers

Recently DEFRA announced some preliminary details surrounding the Lump Sum Exit Scheme which is designed to pay retiring farmers a lump sum in exchange for giving up their Basic Payment entitlements and land. There is plenty of information already and more details to come but there were 5 points in particular which are of interest from a tax and business planning point of view.

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Companies with residential properties: Annual Tax on Enveloped Dwellings

If a company (or partnership with a corporate partner) owns any residential properties it will need to consider whether the Annual Tax on Enveloped Dwellings (ATED) rules apply to it.

ATED is charged on these entities when they hold an interest in any UK residential properties (dwellings) with a value that exceeds £500,000. The property value is assessed at either a valuation reference date or the purchase/development date, if later.

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My company owns intellectual property or goodwill. How can I gain tax relief on this?

Most companies own a variety of fixed assets on which capital allowances are claimed, and many of you will have seen our recent insight on the capital allowances which can be claimed on specialized buildings. Are you also aware of the substantial tax advantages which apply to intellectual property?

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Changes to red diesel use: caught red handed?

Red diesel is simply diesel which is dyed to indicate it is rebated and hence subject to less fuel duty and VAT than normal (white) diesel. Currently, most non-road machinery is capable of being powered by red diesel, which is significantly cheaper than white diesel, but as a result of the government’s climate change policy the exemptions are reformed such that they will only apply to very specific uses such as for agriculture or for non-commercial heating.

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Cost management: rapid tactical changes or a more structured approach?

When circumstances mean that business owners have limited control over their revenue, the only remaining avenue to prop up profitability is focusing on the cost base. It’s always worth being aware of what interventions you might make in spending to maximise your profitability and minimise the risk of fundamental damage to your business.

Some businesses need rapid tactical changes to their costs, and others need more measured structural interventions to cost management.

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Capital Allowances: can specialised buildings qualify as plant and machinery?

Many will be aware of a case that went to tribunal in 2018 in which a taxpayer successfully argued that a custom built grainstore qualified as plant rather than a building and therefore qualified for capital allowances (Stephen May v HMRC 2019). In essence, the cost of the grainstore was allowed in full against the taxpayer’s taxable profits.

Recently a similar case was heard at tribunal regarding a farming business that attempted to claim a potato store as plant and machinery. The story is as follows…

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Green Software – the Growing Trend for 2022

Green software and technology is not a new concept, but has gained traction and publicity due to concerns around the impact of pollution and global warming.

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How Are You Really Doing? Financial Performance

How do you judge your business’ financial performance? Surprisingly, the answer we hear often from clients is that it is still just based on a combination of a general feeling from management and the amount of cash in the bank.

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Organisation design

Is your business set up in the best way possible to achieve its goals for 2022? If this is not absolutely clear, then an in depth assessment of your organisation design will help.

Organisation design is the way that structure, roles, capability, and resources are deployed within a business to deliver a strategy. It is the formal system of accountability that defines key positions and enables the efficient allocation of resources to enable success.

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Accountants donate Christmas gifts to Birmingham Children’s Hospital 

Staff from Droitwich-based professional services firm Ballards LLP have donated a variety of children’s toys, chocolates, cosy socks and pampering gifts to the children and teenagers staying at Birmingham Children’s Hospital over Christmas.

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How To Take The First Step To A Successful Digital Transformation Webinar

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Extension to Capital Gains Tax reporting and payment

I saw in the Budget that there is an extension to Capital Gains Tax reporting and payment to 60 days. I didn’t know we had to report this as I’ve sold a bit of land recently. Should I have reported this by now?

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I have incurred Research and Development Expenditure on a project for a specific customer. Can I claim tax relief on the costs?

The short answer to this question is that any expenses borne by your company in relation to Research and Development (R&D) projects will qualify for tax relief.

However, there is a distinction to be made between two different types of R&D relief which can be claimed for large and small companies.

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Business sales: deferred consideration

There are no strict rules regarding the structure of the consideration for a business sale.

It is not uncommon for an element of the proceeds from the business sale to be deferred and paid at a later date.  

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The Farming Investment Fund: what does it mean for you?

The Farming Investment Fund (FIF) announced last week is designed to provide grants of between £2,000 and £25,000 towards specific farming equipment and technology; and grants of between £35,000 and £500,000 towards larger capital items to improve productivity, profitability, and environmental sustainability; the first of which is The Water Management grant.

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Going green – has the government used tax to drive the right behaviours, or is this a ‘COP’ out?

As environmental policies dominate the news, it started me wondering what tax savings were currently out there for ‘going green’. Tax is much more than just a way of raising money for public finances, it is an incredibly complex tool used to drive behaviours desired by the government. If we are truly serious about climate change as a country, then taxation of business should be evolved to encourage efforts to reduce carbon footprint and punish those who do not change their behaviours. Below I look through a few carbon saving ideas and decide if they are rewarded with tax savings.

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Selling your business?

If you are thinking of selling your business, it is worth taking the time to consider all potential investors’ perspectives before the sale process begins. This will mean you can present your business in the best possible way for anyone who might be considering a purchase to see the value specifically for them.

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Local firm donates household goods to Ronald Mcdonald House Charities UK

Staff from Droitwich-based professional services firm Ballards LLP have recently delivered a collection of food and household goods to Ronald McDonald House Charities UK. The collection will be converted to a cash donation for the charity.

In the event that families do not live close to a hospital where a child is being treated, Ronald Mcdonald House Charities UK provides free accommodation and meals so that parents can be by their child’s bedside in a matter of moments.

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Digital Transformation: Now is the time to consider long-term success

Over the last 18 months Covid-19 has forced many businesses to undertake tactical digital transformation projects to continue operations, for example enabling remote working of colleagues, setting up eCommerce sales channels etc. 

These tactical transformations may have addressed the short-term need forced by the Covid-19 pandemic, but now is the time to consider the long-term success that digital transformation can bring. 

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Autumn Budget review

The Chancellor today (27th October) unveiled his Autumn Budget. As with all Budget announcements, the devil is in the detail and further information will no doubt be released by the government shortly.

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My project was unsuccessful or abandoned. Can I still claim Research and Development Tax relief?

When looking at a Research and Development tax claim (R&D), there are 4 main questions that we seek to answer, based on the criteria HMRC will use to evaluate the claim.

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Safe as Houses? – Buying, Selling Or Investing In Property

With the current property boom, I am sure that amongst the readers of this document there is a significant proportion of people who are buying, selling, or investing in property. There are lots of tax implications out there which are not straight forward and lots of areas you should seek advice on. On that basis, I have listed a number of common thoughts around residential property which might spark some thought.

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Should The Tax Year End Change?

The tax landscape is changing rapidly.  This change is driven by the government’s push to replace paper-based tax filings with more economical digital filing procedures.

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Digital Transformation – Why you need a current state review

I hear many business owners talking about the need for digital transformation and the benefits of becoming a digitally enabled business.  Though, far too often businesses will start their digital transformation journey without assessing their current state, often leading to the costly purchase of systems that are not right for the current or future business.

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Have you done Research and Development as a result of COVID?

As the Summer draws to a close, and the children go back to school, it is the time of year when our routine begins to return to normal. This has led me to reflect on many changes which have occurred over the last 18 months as a result of our pandemic. Much of our life has changed with a greater reliance on remote working, and the requirement for maintenance of social distancing.

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What keeps you awake at night? (Protect Your Business)

Many people think accountants are there just to give good tax advice. We can of course do that, but our advice is so much more than that! One thing I am keen to talk to people about is the doomsday scenario – have you thought about what would happen to your business if something went drastically wrong? Perhaps an unfortunate accident involving an employee or customer, a major error leading to a loss of customer confidence, or a serious data breach? Unfortunately, despite all of the best planning in the world, serious issues do occur. What can businesses do to protect their assets in a doomsday scenario?

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Increases to National Insurance & Dividend Tax Rates

Boris Johnson yesterday (07/09/21) announced his long-awaited social care reform and the start of the much-anticipated tax hikes for the masses following the COVID-19 pandemic announcing increases to National Insurance and Dividend tax rates.

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Inheritance Tax On Your Home – The Residential Nil Rate Band

Transfers of assets between most married couples/civil partners in the UK are exempt from inheritance tax (IHT) whether made at death or during their lifetime.  At death transfers from an estate to other persons will generally be subject to IHT unless another relief, exemption or allowance can be set against the value of the transfer.

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Getting Management Information Right

Getting the right management information and key performance indicators (KPIs) in the right format at the right time is vital to controlling a business. However, there are many common problems encountered on the road to getting this right.

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Does software development qualify for research and development (R&D) tax relief?

There are two manners in which software development may qualify for R+D tax relief.

Qualifying as part of a larger project

The first is where it is being used as a tool as part of a project, rather than being an end goal, for example, developing software to use in testing machinery, recording results, or designing prototypes. The development costs will then be allowable as part of the expenditure on this larger project.

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Time to take stock and stock take

It always amazes me how many businesses out there still put little reliance on thinking about stock and work-in-progress. There are lots of practical reasons why counting stock and valuing work-in-progress is an excellent idea; forward planning on stock requirements, monitoring cashflow requirements, improving physical controls around stock, and reducing the risk of stock going missing to name but a few.

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If I have claimed the bounce-back loan, can I still qualify for Research and Development relief?

The short answer to this question is yes. However, the answer is not as simple as you might expect.

In order to understand the effect of the coronavirus support schemes on qualification of companies for tax relief, we first need to understand a couple of terms. There are two different schemes for relief, the first (RDEC scheme) is targeted towards large companies, while the second (SME scheme) is targeted towards small and medium-sized enterprises.

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Consultation in respect of basis periods

Following an initial on basis periods on 20 July 2021, the government confirmed in their Autumn Budget that basis period reform would be going ahead from April 2024, one year later than originally planned.

It may be that this could have cash flow implications for your businesses and therefore this needs to be assessed and planned for.

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HMRC Quadruple Tax Investigations

Recent data published by HMRC showed it opened 102,000 compliance investigations in Q1 2021, up 36 percent from 75,000 in the previous quarter.

This was almost quadruple the low of just 27,000 in the second quarter of 2020.

HMRC is turning its focus back to tax investigations as the pandemic has left it with a lot of catching up to do.

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Customer Led Research And Development

R&D under the beneficial SME scheme is only allowed if the project is not subsidised.
This is not a new rule, but HMRC have recently started to change their view of when an R&D project is considered to be subsidised.
In some cases HMRC are now treating projects that are undertaken for a specific customer as being subsidised by that customer and therefore ineligible for the beneficial SME R&D relief.

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Liz Peters Appointed To Tax Faculty

We are delighted to announce that Tax Partner Liz Peters has recently been appointed to the board of the Institute of Chartered Accountants in England & Wales (ICAEW) Tax Faculty.

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Digital Transformation – How & Where Do I Start?

The majority of business owners understand the need for digital transformation and the benefits of becoming a digitally enabled business, though a question I often get asked is:

“Where and how do I start Digital Transformation?”

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Is the thing the thing we think that the thing really is?

It has always amused me when tax cases arise deciding on how to categorise a certain product or good. These cases often lead to large numbers of highly paid lawyers battling it out, with huge sums of money at stake, over what would appear completely trivial to most of us. However, some of these have real life relevance to many OMBs, so it is definitely worth asking yourself if the tax treatment of the things that you are doing is correct.

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Selling Farm Machinery – Do I Have To Pay Tax?

“We operate as a farming partnership and are looking to raise some cash. One suggestion my partner made was to sell some of our machinery, but I am concerned we will have to pay tax. Is this right?”

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IT system procurement is not just negotiating the lowest licence fee

Negotiating and procuring a new I.T system is not a simple process and can be a very daunting experience.

Negotiation and procurement is a very important stage in selecting and implementing a new I.T system, and it is crucial that sufficient effort and time is assigned to this process.  It is key to realise that this process is not just about negotiating the lowest licence fees and day rate, there are many factors that need to be considered, negotiated and agreed. 

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